10-17-07 - Currency -foreign exchange market is where...

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Currency -foreign exchange market is where dollars traded for other currencies -dollar has weakended since 02 -but constant with respect to chinesse Yen Exchange rate fluctuations 3 things that shift demand 1) Change in demand for U.S. exports -higher demand for exports increase in D for dollars -lower demand for exports reduced in D for dollars 2) US interest rate-foreign interest rates -money changes highest return -if US interest rate increases relative to foreign rates increase in D for dollars -and opposite 3) Change in expected exchange rate -if dollar is expect to get tronger tomorrow, D for dollars increases today -and opposite 3 things that shift supply 1) US demand for foreign imports -to buy imports, we need foreign currency -have to sell dollars increase in S of dollars -lower demand for imports lower S of dollars 2) US interest rate-foreign interest rate -in US interest rate increases relative to foreign rates reduce S of dollars
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10-17-07 - Currency -foreign exchange market is where...

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